Fraud Unit Would Catch Minn. Child Care Cheats

A proposed Department of Human Services Fraud Unit being debated at the Capitol would finally target errors and abuse in the state's Child Care Assistance Program, five years after state watchdogs first warned that a severe lack of oversight meant the department was catching fraud in the $400 million program solely "by chance."

"Help is on the way," declared an optimistic DHS Commissioner Lucinda Jesson in an interview Friday.

The request to lawmakers from the DHS commissioner for $318,000 in initial funding for six investigators and analysts plus two licensors is included in a broader omnibus Health and Human Services bill that has not yet come up for votes on the House and Senate floor.

DHS estimates that in the first four years the fraud unit would recover at least $2 million from its targeted efforts to audit about seven percent of child care providers, more than enough for the unit to pay for itself and to help more families enroll in the program.

An ongoing 5 EYEWITNESS NEWS investigation into Welfare Waste, begun in 2010, showed the Child Care Assistance Program overpaid $7.2 million between 2006 to 2010, and $2.1 million in 2010 alone.

As of December 2012, 6,281 families were on the waiting list for state-funded child care, qualified but unable to enter the program because DHS ran out of money.

"We need to do a better job detecting and pursuing fraud when it happens," said Jesson, an appointee of DFL Gov. Mark Dayton. "So I'm very hopeful that the Legislature will see the merit in this unit."

While there appeared to be bipartisan sentiment toward supporting such an effort among lawmakers surveyed by 5 EYEWITNESS NEWS, the reality of a $627 million budget shortfall means every expenditure - and especially requests for new money - will be scrutinized closely at the Capitol.

"Every dollar is going to be fought for, but stopping fraud and abuse is something that I think the public expects," said Rep. Tara Mack, the lead Republican on the House Health and Human Services Policy committee.

"My intention is to work very closely across the aisle on this issue in order to address some of the unaccountability we're seeing in this program currently," Rep. Mack said Friday.

The fraud unit's chief author in the Senate, Sen. Tony Lourey (DFL-Kerrick), promised to ensure DHS's request would be taken "very, very seriously," because vigorous oversight "is long overdue."

"It's a wise investment," he said. "Make it a much more proactive unit, that wouldn't just stumble upon fraud, but go out and look for it."

A 2011 report by the Office of the Legislative Auditor found DHS oversight of the program was woefully inadequate, a message it has sent for the past four years.

When asked in a 2011 interview how DHS was equipped at the time to catch errors, fraud, and abuse, deputy Legislative Auditor Cecile Ferkul answered bluntly: "By chance."